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07.09.2007
Originally featured on BroadcastEngineering.com
Tribune faces TV station cross-ownership issues

Late next month, the shareholders of Tribune are scheduled to vote on an $8.2 billion proposal to take the company private. Looming in the wings is a possible deal breaker — the sale of the company’s television and radio stations.

Before the deal can be complete, the FCC must approve the license transfer of Tribune’s 23 TV stations and one radio station to the new company, led by real estate mogul Sam Zell. The commission must also issue waivers allowing the company to hold on to TV stations in Los Angeles and four other cities where Tribune also owns newspapers.

But there’s a problem: Federal broadcast cross-ownership regulations prohibit the same company from owning a newspaper and a TV station in the same city.

To keep the deal from collapsing, Tribune needs FCC waivers to hold on to KTLA-TV Channel 5 and TV stations in New York, Chicago, Fort Lauderdale, FL, and Hartford, CN.

In an earlier time, under the Republican-controlled and pro-business FCC majority, such waivers would have been no problem. But now, with Democrats in control of Congress and administering close oversight over the FCC, the matter is not trivial.

Adding to the mix of uncertainty is the timing of the request. The FCC is currently engaged in a series hearings about the relaxing of its media ownership rules. One of the most contentious issues in the debate is the elimination of the ban on cross-ownership of newspapers and TV stations in the same market.

Tribune is caught in the middle and hopes to get FCC approval before the end of the year, company spokesman Gary Weitman told the “Los Angeles Times” last week.

Many Democrats and consumer groups, however, adamantly oppose changing the rule because they argue that media consolidation leads to a lack of diversity. Several of those groups, including “Consumer Reports” publisher Consumers Union, Consumer Federation of America and the United Church of Christ, have formally opposed Tribune’s waiver requests.

Tribune executives have been lobbying influential Democrats in Congress to give political cover to FCC Chairman Kevin Martin if his Republican majority grants the essential waivers. Such a grant, however, would not come without major conflict.

As an alternative, Tribune has tried to float the idea of temporary waivers that would allow the company to keep the TV stations and newspapers until the FCC finishes its media ownership deliberations. Critics of the idea say that granting a temporary waiver tied to the FCC’s media ownership deliberations could allow the company to continue operating the newspapers and TV stations in the five markets for years to come.



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